The mobile payments initiative Softcard laid off as many as 60 staffers in what it describes as "simplifying" and "consolidating" operations into offices in Dallas and New York. "Softcard is taking steps to reduce costs and strengthen its business," the company stated. But some experts suggest the competition may be too stiff, and that the staff cuts are a sign the initiative is in trouble.
Softcard – a mobile wallet initiative launched by a joint venture among leading wireless carriers Verizon, AT&T and T-Mobile – has been plagued with an identity crisis and a growing army of competitors. Originally launched as ISIS, the company changed its name in the summer of 2014 to avoid confusion with the Islamist militant group known by the acronym ISIS.
Shortly after came news that Apple Inc. was launching a near field communication (NFC) -based mobile payment app, Apple Pay, which effectively locks out the Softcard app from the latest generation of Apple phones.
"What Softcard had was a good idea," said industry consultant Paul Martaus. But few things can trump Apple. "The fact is that once Apple makes a move it defines the marketplace," added Martaus, himself one of more than 1 million consumers Apple says now use Apple Pay.
What separates Apple Pay (which comes pre-installed with the iPhone 6) from other mobile payment apps is ease of use, proponents have noted. The app gets activated when a user waves an NFC-enabled iPhone 6 in the vicinity of an NFC-enabled terminal; the transaction is confirmed with a simple fingerprint swipe.
Softcard, on the other hand, requires multiple steps to initiate payments: opening the app, entering a PIN, selecting a payment card and confirming the purchase. Likewise for Google Pay. Both Google Pay and Softcard also need to be downloaded to compatible (Android) smartphones. "Seamlessness is the answer, and Apple Pay is seamless," Martaus said.
In addition to Apple Pay and Softcard, dozens of mobile payment schemes are available to consumers, including Google Pay (which also uses NFC) and CurrentC, a scheme backed by leading retailers that uses quick response codes in lieu of NFC to communicate with POS devices. CurrentC suffered some public backlash in the fall of 2014 when word leaked that key members of the retailer consortium were refusing to accept Apple Pay mobile payments through their NFC-enabled POS devices.
While mobile payments lag far behind other methods of paying by credit or debit cards, overall adoption is growing. This year U.S. consumers are expected to make nearly $10 billion in mobile payments, according to the digital marketing firm eMarketer, which expects that total to exceed $60 billion in 2017.
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